Dollar retreats as US job growth turned tail, euro recovers


US dollar, euro and EUR/USD trending points

  • Dollar dwindled against gauge of global currencies on Friday’s (March 8th) market closure, as Friday’s US employment data revealed a much-sagged outlook than predicted
  • Euro rebounds from a 20-month low lined to ECB’s dovish monetary policy shift, following release of US job data
  • The Swedish Crown fell to a 16-year low versus American Dollar, as its central bank started to voice Europe and Canada’s lead, adopting a cautious outlook.

Dollar eases gains, euro rebounds and Swedish Crown fell to a record 16-year low

On Friday, the 8thof March, the American dollar had fallen against most of the majors including euro, Australian dollar and Canadian dollar, alongside emerging market currencies as well as Latin American currencies.

However, following yesterday’s (March 7th) release of ECB and other central bank’s hints that they might pump more stimulus to support their slowing economy, while cutting interest rate further, the US dollar jumpstarted and scored its biggest intra-day gains against a stack of currencies over the last seven months.

Never the less, the traders started to sold the American dollar earlier on Friday (March 8th), after US job growth frustrated most of the buyers of American dollar, as the data showed an almost stalled US job market in February, while US payroll data had also shown contraction. According to Friday’s (March 8th) US job data, there had been roughly a 20,000-job increase in the domestic payroll last month, which fell much shorter than the forecasted level of 1,80,000 jobs. Yet, the brighter side has been over the US unemployment rate, which fell back below four percent, alongside the average hourly earning had also accelerated by 0.4 percent.

- Advertisement -

At the end of US trading session, index that tracks the US dollar against a basket of six major currencies had been down at 97.31, although it reached a nearly three-month high to 97.71 on Thursday (March 7th). Much of the USD greenbacks were raised for a steep sell-off pressures from euro yesterday, while GBP held strong above 1.30 level despite a fresh round of Brexit chaos ahead next week.

DXY daily price chart

DXY daily price chart

EUR/USD daily price chart

EUR/USD daily price chart

On Friday, March 8th, the Euro rose 0.44 percent against the American dollar to $1.1242, rebounding from a 20-month low at $1.1175 yesterday (March 7th). Among other G10 nations, the Swedish Crown had been digesting further selling pressures, while it breached a 16-year low on Friday (March 8th) against USD, hitting 9.4890. Besides, it touched 10.6465 versus euro, its lowest level since last August.

USD/SEK daily price chart

USD/SEK daily price chart

The Swedish Crown dipped again on Friday, as the Swedish Central Bank’s governor Stefan Ingves sent a downbeat statement to the parliament. The British Currency fell more than 0.50 percent to 1.3015 in a volatile Friday (March 8th), while the AUD/USD pair posted a gain of 0.41 percent to $0.7041.

AUD/USD daily price chart

AUD/USD daily price chart

Bottom Line

So far, the USD greenback seemed to be waning and it might fall below 96.50 level, a critical support level on further selling pressure raising from growth worries. Meanwhile the safe-haven commodities like gold would likely to gain next week alongside the safe-haven currencies Japanese Yen and Swiss Franc. The American dollar would likely to lose its safe-haven appeal next week.

Never the less, the EUR/USD greenback may continue, as Euro enters into an oversold territory, and a downswing appears to be due, although it may not show itself in a near-term outlook. In the meantime, the pair would likely to reside between 1.10-1.12 level, while analysts were predicting a move towards 1.08 level in a near-term outlook after Thursday’s (March 7th) fall. Friday’s gain had eased off some selling pressure of Euro and GBP may lose momentum next week ahead of Brexit vote due to be held of March 12thand investors are eyeing towards 1.26-1.28 level for a safer buying position.

Read more on USD here

[Disclaimer: The content of this article is personal opinion and should not be considered as]


Please enter your comment!
Please enter your name here